Court Second-Guesses City, Finding Incorrect Description of Project Objective and Purpose Invalidates EIR

by Manatt, Phelps & Phillips, LLP

As the year comes to an end, the California Environmental Quality Act (CEQA) is facing a heightened level of focus from legislators and the general public as CEQA reform efforts for 2013 begin to take shape across the state. While reforming CEQA has been the subject of spirited debate for more than 30 years, the present effort appears to have unique momentum.

As CEQA experts work to craft a legislative CEQA reform approach that can garner the necessary political support, the California judiciary is simultaneously wrestling with a number of open CEQA questions. In the past week alone, the Courts of Appeal issued several CEQA opinions, including an important ruling finding that EIR project objectives that do not accurately describe a project's underlying purpose result in a failure to consider feasible alternatives in violation of CEQA.

Case Summary

Identifying project objectives and analyzing a reasonable range of alternatives are critical components of any EIR. Under CEQA, the statement of objectives should include the underlying purpose of the project, and it should be clearly written since it will guide the selection of alternatives to be evaluated in an EIR. Relatedly, an EIR must consider a reasonable range of alternatives to the proposed project that would attain most of the project's basic objectives while reducing or avoiding any of its significant effects. Thus, project objectives inform the range of alternatives that must be analyzed and can serve as a basis upon which to ultimately determine the feasibility of alternatives. If the project objectives do not accurately describe the underlying purpose of the project, then it is likely that the range of alternatives considered also will be improper.

This is precisely what happened in the recent case, Habitat and Watershed Caretakers v. City of Santa Cruz (2012) __ Cal.App.6th __ (Case No. H037545), where the court found that the EIR was inadequate because it incorrectly described the project's primary objective, which resulted in a failure to consider potentially feasible alternatives and mitigations that would have reduced the project's significant environmental impacts. In other words, the EIR's misdescription of objectives tainted its consideration of alternatives. This case highlights the importance of carefully crafted project objectives, and that an ounce of prevention at the commencement of the EIR process is worth a pound of cure.

In Habitat, the City and the Regents of the University of California settled a prior CEQA action challenging the University's planned expansion of the campus outside the City's boundaries. The settlement agreement required the City to seek LAFCO approval for the City to provide extraterritorial water and sewer service for the expansion. The City prepared an EIR that LAFCO ultimately would consider in connection with its approval. Among other things, the EIR stated that the project objective was to implement the obligations in the settlement agreement to provide water and sewer service, and also identified a single significant and unavoidable impact that there would be inadequate water supplies to serve the project in dry-year conditions.

Notwithstanding the identified significant and unavoidable water supply impact, the EIR did not analyze a limited water or limited development alternative because it reasoned that such alternatives would not accomplish the project's primary project objective to obtain LAFCO approval and implement the settlement agreement. The court held that the EIR's statement of project objectives improperly described only the nature of the project approvals, and not the project's underlying purpose, reasoning that the purpose of the project was to provide the University with the water needed to develop the expansion and satisfy certain other requirements necessary to trigger the University's obligation in the settlement agreement to build on-campus housing.  Accordingly, by failing to include any alternatives that would reduce impacts on the City's water sources, the EIR failed to satisfy CEQA's informational mandates, which included providing LAFCO with information on alternatives.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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